Industry leaders laud U.S. oil, gas production as 'game changer'

Oil operations are in the Bakken Shale near Watford City, N.D. North Dakota helped build up Exxon Mobil's oil and natural gas reserves.

Oil operations are in the Bakken Shale near Watford City, N.D. North Dakota helped build up Exxon Mobil's oil and natural gas reserves.

Photo: Matthew Staver

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No. 5 EOG Resources ranked as the fifth-best workplace in the nation.

No. 5 EOG Resources ranked as the fifth-best workplace in the nation.

Photo: Courtesy Photo

Industry leaders laud U.S. oil, gas production as 'game changer'

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Leaders from business, manufacturing and chemical groups struggled Thursday to find superlatives big enough to describe the transformation in the United States' energy landscape amid an explosion in domestic oil and gas production.

Sean McGarvey, president of the AFL-CIO's building and construction trades department, said the recent surge of oil and natural gas being extracted from shale and other dense rock formations nationwide is a "game changer" that translates into jobs for the workers he represents.

John Larson, a vice president at IHS Global Insight, described a "tsunami of production coming online" from the Bakken in North Dakota, the Eagle Ford shale in South Texas and other parts of the country.

And American Petroleum Institute President Jack Gerard said a "revolution in shale energy" is giving an advantage to the Western Hemisphere and providing the U.S. with a new avenue to "heal our economy and put it back on track."

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The commentators, who shared their optimistic outlooks during an API-sponsored forum on energy and the election in the nation's capital, broadly described the spike in domestic oil and gas production as essential to driving growth despite a sluggish economy.

A major theme: how factories downstream are harnessing the oil and gas being pulled out of the ground in the West, Northeast and Midwest not just to power operations, but also as a feedstock transformed into products domestically.

Owen Kean, senior director for energy policy at the American Chemistry Council, said that as long as natural gas liquids are pouring out of wells, "we will continue to enjoy a decisive competitive advantage."

Kean said the industry has responded to the promise of cheap and abundant natural gas by announcing more than $40 billion in new investments in the U.S. over the next several years.

Ross Eisenberg, vice president of energy and resources policy for the National Association of Manufacturers, noted that it is still 20 percent more expensive to produce goods in the United States compared to overseas. But U.S. manufacturing enjoys a cost advantage when it comes to energy.

Foreign sales a factor

A potential threat to the equation is the possibility that the U.S. will begin selling more of its natural gas bounty overseas.

The Energy Department is vetting applications from more than a half dozen companies to begin exporting liquefied natural gas. Pending proposals could put the U.S. on track to export more than 16 billion cubic feet daily.

An Energy Department study expected later this year will evaluate how selling more American-harvested natural gas overseas would affect prices for U.S. consumers.

But Christopher Guith, vice president for policy at the U.S. Chamber of Commerce's Institute for 21st Century Energy, downplayed that worry, noting that it would take a while for liquefaction and export facilities to come online. That would mean "marginal at best" impacts from exports.